The Accounting Rate of Return Method for Evaluating Proposed Investments

question 56

Multiple Choice

The accounting rate of return method for evaluating proposed investments:

• A)is based on cash receipts and disbursements related to the investment.
• B)uses accounting net income from the operating budget.
• C)does not recognize the time value of money.
• D)is easier to use than the net present value method.

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Definitions:

Predictive Of Behaviour

Refers to factors or variables that are capable of anticipating or forecasting future actions or attitudes of individuals.

Psychology Of Persuasion

The study of how individuals influence others' beliefs, attitudes, and behaviors through communication and other techniques.

Implicit Theory

Beliefs or assumptions that individuals hold about how certain traits, behaviors, and personality characteristics are interrelated and can change over time.

Primacy Effect

The psychological principle that items or information presented early in a list are remembered better than those presented later.